Agreement on Reciprocal Encouragement and Protection of Invest-ments Between the People's Republic of China and the Kingdom of Spain
Agreement on Reciprocal Encouragement and Protection of Invest-ments Between the People's Republic of China and the Kingdom of Spain
Whole document
The People's Republic of China and the Kingdom of Spain (hereinafter
referred to as "The Contracting Parties"), desiring to encourage, protect
and create favorable conditions for investment by investors of one
Contracting Party in the territory of the other Contracting Party based on
the principles of mutual respect for sovereignty, equality and mutual
benefit and for the purpose of the development of economic cooperation
between both countries,
Have agreed as follows:
Article 1
For the purpose of this Agreement,
1. The term "investments" means every kind of assets invested by
investors of one Contracting Party in accordance with the laws and
regulations of the other Contracting Party in the territory of the Latter,
including mainly:
(1) movable and immovable property and other property rights such as
mortgages, liens or pledges;
(2) shares in companies or other forms of participation in companies;
(3) a claim to money or to any performance having an economic value;
(4)copyrights, industrial property, know-how and technological
process;
(5)concessions conferred by law or contract, including concessions to
search for or exploit natural resources.
2. The term "investors" means:
in respect of the People's Republic of China:
(1)natural persons who have nationality of the People's Republic of
China in accordance with its law;
(2)economic entities established in accordance with the laws of the
People's Republic of China and domiciled in the territory of the People's
Republic of China;
in respect of the Kingdom of Spain:
(1)natural persons who have nationality of the Kingdom of Spain
according to its law;
(2)economic entities established in accordance with the laws of the
Kingdom of Spain and domiciled in its territory.
3. The term "return" means the amount yielded by investments, such as
profits, dividends, interests, royalties or other legitimate income.
4. The term "territory" designates the land territory and territorial
waters of each of the Contracting Parties. This Agreement shall also apply
to investments made by investors of either Contracting Party in the
exclusive economic zone and the continental shelf that extends outside the
limits of the territorial waters of the other Contracting Party, over
which they have or may have sovereign rights and jurisdiction for the
purpose of prospecting, exploration and conservation of natural resources,
pursuant to international law.
Article 2
1. Each Contracting Party shall encourage investors of the other
Contracting Party to make investments in its territory and admit such
investments in accordance with its laws and regulations.
2. Each Contracting Party shall grant assistance and provide
facilities for obtaining visa and working permit, within the framework of
its law, to investors of the other Contracting Party in the territory of
the Former in connection with activities associated with their
investments, such as the execution of contracts related to manufacturing
licences and technical, commercial, financial, administrative and
consulting assistance.
Article 3
1. Investments made by investors of either Contracting Party shall at
all times be accorded fair and equitable treatment and shall enjoy the
most constant protection and security in the territory of the other
Contracting Party. Each Contracting Party agrees that without prejudice to
its laws and regulations it shall not take any unreasonable or
discriminatory measure against the management, maintenance, use or
disposal of investments in its territory of investors of the other
Contracting Party. Each Contracting Party shall observe any obligation it
may have entered into with regard to investments of investors of the other
Contracting Party.
2. The treatment and protection referred to in paragraph 1 of this
Article shall not be less favorable than that accorded to investments and
activities associated with such investments of investors of a third State.
3. The treatment and protection as mentioned in paragraphs 1 and 2 of
this Article shall not include any preferential treatment accorded by the
other Contracting Party to investments of investors of a third State based
on customs union, free-trade zone, economic union, agreement relating to
avoidance of double taxation or for facilitating frontier trade.
4. In addition to the provisions of paragraph 2 of this Article,
either Contracting Party shall accord treatment in accordance with the
stipulations of its laws and regulations to the investments of investors
of the other Contracting Party the same as that accorded to its own
investors.
Article 4
1. Neither Contracting Party shall expropriate, nationalize or take
similar measures (hereinafter referred to as expropriation) against
investments of investors of the other Contracting Party in its territory,
unless the following conditions are met:
(1)in the public interest;
(2)under domestic legal procedure;
(3)without discrimination;
(4)against compensation.
2. The compensation mentioned in Paragraph 1, (4) of this Article
shall be equivalent to the value of the expropriated investments at the
time when expropriation is proclaimed, be convertible and freely
transferable. The compensation shall be paid without undue delay.
Article 5
1. Investors of one Contracting Party whose investments in the
territory of the other Contracting Party suffer losses owing to war or
other armed conflict, revolution, a state of national emergency, revolt,
or riot in the territory of the latter Contracting Party shall be accorded
by the latter Contracting Party treatment no less favourable than that
which the latter Contracting Party accords to investors of any third
State.
2. Without prejudice to paragraph 1 of this Article, investors of one
Contracting Party who in any of the situations referred to in that
paragraph suffer losses in the territory of the other Contracting Party
resulting from
(1)requisitioning of their property by its forces or authorities, or
(2)destruction of their property by its forces or authorities which
was not caused in combat action or was not required by the necessity of
the situation,
shall be accorded restitution or appropriate fair and
non-discriminatory compensation.
3. Resulting payments under this Article shall be made in convertible
currency, freely transferable and without undue delay.
Article 6
1. Each Contracting Party shall, subject to its laws and regulations,
guarantee investors of the other Contracting Party the transfer of their
investments and returns held in the territory of the one Contracting
Party, including:
(1)profits, dividends, interests and other legitimate income;
(2)amounts from total or partial liquidation of investments;
(3)payments made pursuant to a loan agreement in connection with
investment;
(4)royalties in paragraph 1, (4) of Article 1;
(5)payments of technical assistance or technical service fee,
management fee;
(6)payments in connection with projects on contract;
(7)earnings of nationals of the other Contracting Party who work in
connection with an investment in the territory of the one Contracting
Party.
2. The transfers mentioned above shall be made at the prevailing
exchange rate of the Contracting Party accepting investment on the date of
transfer.
3. The transfers shall be made in freely-convertible foreign
currencies within such a period as is normally required according to
international financial practices and not later than six months.
4. The Contracting Party accepting the investment shall allow the
investors of the other Contracting Party, or the companies in which they
have invested, to have access to the official foreign-exchange market in a
nondiscriminatory manner so that the investors may purchase the necessary
foreign currency to make the transfers pursuant to this Article.
5. Protection of those transfers under the present Agreement will only
be granted when the investors have complied with the tax regulations in
the Contracting Party accepting the investment.
6. The Contracting Parties agree to accord to transfers referred to in
paragraph 1 of this Article a treatment no less favourable than that
accorded to transfers originated from investments made by investors of any
third State.
Article 7
In the event that a Contracting Party has issued a financial guarantee
relative to non-commercial risks connected with an investment made by an
investor of that Contracting Party in the territory of the other
Contracting Party, the latter shall accept the application of the
principle of subrogation of the first Contracting Party in respect of the
economic rights of the investors but not in respect of property rights,
from the time when the first Contracting Party made a first payment
charged to the guarantee issued.
This subrogation will make it possible for the first Contracting Party
to be the direct beneficiary of all the payments for compensation of which
the initial investor could be a creditor. In no event can a subrogation
confer rights in respect of property, use, enjoyment or any other rights
deriving from ownership of the investment without the pertinent
authorizations having previously been obtained, pursuant to the current
law on foreign investments in the Contracting Party in whose territory the
investment was made.
Article 8
1. Any dispute between the Contracting Parties concerning the
interpretation or application of this Agreement shall, as far as possible,
be settled by consultation through diplomatic channel.
2. If a dispute cannot thus be settled within six months, it shall,
upon the request of either Contracting Party, be submitted to an ad hoc
arbitral tribunal.
3. Such tribunal comprises of three arbitrators. Within two months
from the date on which either Contracting Party receives the written
notice requesting for arbitration from the other Contracting Party, each
Contracting Party shall appoint one arbitrator. Those two arbitrates
shall, within further two months, together select a third arbitrator who
is a national of a third State which has diplomatic relations with both
Contracting Parties. The third arbitrator shall be appointed by the two
Contracting Parties as Chairman of the arbitral tribunal.
4. If the arbitral tribunal has not been constituted within four
months from the date of the receipt of the written notice for arbitration,
either Contracting Party may, in the absence of any other agreement,
invite the President of the International Court of Justice to appoint the
arbitrator(s) who has or have not yet been appointed.
If the President is a national of either Contracting Party or is
otherwise prevented from discharging the said function, the next most
senior member of the International Court of Justice who is not a national
of either Contracting Party shall be invited to make the necessary
appointment (s).
5. The arbitral tribunal shall determine its own procedure. The
tribunal shall reach its award in accordance with the provisions of this
Agreement and the general principles of international law.
6. The tribunal shall reach its award by a majority of votes. Such
award shall be final and binding on both Contracting Parties. The ad hoc
arbitral tribunal shall, upon the request of either Contracting Party,
explain the reasons of its award.
7. Each Contracting Party shall bear the cost of its appointed
arbitrator and of its representation in arbitral proceedings. The relevant
costs of the Chairman and the tribunal shall be borne in equal parts by
the Contracting Parties.
Article 9
1. A dispute between an investor of one Contracting Party and the
other Contracting Party concerning an amount of compensation referred to
in Article 4 which has not been amicably settled after a period of six
months from written notification of that dispute shall be submitted to
international arbitration.
2. Where the dispute is referred to international arbitration, the
investor and the other Contracting Party concerned in the dispute may
agree to refer the dispute either to:
(1)an international arbitrator appointed by the parties to the
dispute; or
(2)an ad hoc arbitral tribunal to be appointed under a special
agreement between the parties to the dispute; or
(3) an ad hoc arbitral tribunal established under the Arbitration
Rules of the United Nations Commission on International Trade Law; or
(4)the International Center for Settlement of Investment Disputes
(ICSID) set up by the Convention on Settlement of Investment Disputes
between States and Nationals of other States, in case both Contracting
Parties become member States of this Convention.
3. If after a period of three months after the dispute is referred to
arbitration under paragraph 2 above there is no such agreement, the
parties to the dispute shall be bound to submit it to arbitration under
the Arbitration Rules of the United Nations Commission on International
Trade Law as then in force. The parties to the dispute may agree in
writing to modify these Rules.
Article 10
If the treatment to be accorded by one Contracting Party in accordance
with its laws and regulations to investments or activities associated with
such investments of investors of the other Contracting Party is more
favourable than the treatment provided for in this Agreement, the more
favorable treatment shall be applicable.
Article 11
This Agreement shall apply to investments which are made prior to or
after its entry into force by investors of either Contracting Party in
accordance with the laws and regulations of the other Contracting Party in
the territory of the Latter.
Article 12
1. The representatives of the two Contracting Parties shall hold
meetings from time to time for the purpose of :
(1)reviewing the implementation of this Agreement;
(2)exchanging legal information and investment opportunities;
(3)resolving dispute arising out of investments;
(4)forwarding proposals on promotion of investment;
(5)studying other issues in connection with investment.
2. Where either Contracting Party requests consultation on any matters
of Paragraph 1 of this Article, the other Contracting Party shall give
prompt response and the consultation be held alternately in Beijing and
Madrid.
Article 13
1. This Agreement shall enter into force on the first day of the
following month after the date on which both Contracting Parties have
notified each other in writing that their respective internal legal
procedures have been fulfilled, and shall remain in force for a period of
ten years.
2. This Agreement shall continue in force if either Contracting Party
fails to give a written notice to the other Contracting Party to terminate
this Agreement one year before the expiration specified in paragraph 1 of
this Article.
3. After the expiration of the initial ten-year period, either
Contracting Party may at any time thereafter terminate this Agreement by
giving at least one year's written notice to the other Contracting Party.
4. With respect to investment made prior to the date of termination of
this Agreement, the provisions of Articles 1 to 12 shall continue to be
effective for a further period of ten years from such date of termination.
In witness whereof, the duly authorized representatives of their
respective Governments have signed this Agreement.
Done in duplicate at Madrid on February 6, 1992 in the Chinese,
Spanish and English languages, all of which being equally authentic.
For the People's For the Kingdom of Spain
Republic of China
Qian qishen ..................
ransfers referred to in
paragraph 1 of this Article a treatment no less favourable than that
accorded to transfers originated from investments made by investors of any
third State.
Article 7
In the event that a Contracting Party has issued a financial guarantee
relative to non-commercial risks connected with an investment made by an
investor of that Contracting Party in the territory of the other
Contracting Party, the latter shall accept the application of the
principle of subrogation of the first Contracting Party in respect of the
economic rights of the investors but not in respect of property rights,
from the time when the first Contracting Party made a first payment
charged to the guarantee issued.
This subrogation will make it possible for the first Contracting Party
to be the direct beneficiary of all the payments for compensation of which
the initial investor could be a creditor. In no event can a subrogation
confer rights in respect of property, use, enjoyment or any other rights
deriving from ownership of the investment without the pertinent
authorizations having previously been obtained, pursuant to the current
law on foreign investments in the Contracting Party in whose territory the
investment was made.
Article 8
1. Any dispute between the Contracting Parties concerning the
interpretation or application of this Agreement shall, as far as possible,
be settled by consultation through diplomatic channel.
2. If a dispute cannot thus be settled within six months, it shall,
upon the request of either Contracting Party, be submitted to an ad hoc
arbitral tribunal.
3. Such tribunal comprises of three arbitrators. Within two months
from the date on which either Contracting Party receives the written
notice requesting for arbitration from the other Contracting Party, each
Contracting Party shall appoint one arbitrator. Those two arbitrates
shall, within further two months, together select a third arbitrator who
is a national of a third State which has diplomatic relations with both
Contracting Parties. The third arbitrator shall be appointed by the two
Contracting Parties as Chairman of the arbitral tribunal.
4. If the arbitral tribunal has not been constituted within four
months from the date of the receipt of the written notice for arbitration,
either Contracting Party may, in the absence of any other agreement,
invite the President of the International Court of Justice to appoint the
arbitrator(s) who has or have not yet been appointed.
If the President is a national of either Contracting Party or is
otherwise prevented from discharging the said function, the next most
senior member of the International Court of Justice who is not a national
of either Contracting Party shall be invited to make the necessary
appointment (s).
5. The arbitral tribunal shall determine its own procedure. The
tribunal shall reach its award in accordance with the provisions of this
Agreement and the general principles of international law.
6. The tribunal shall reach its award by a majority of votes. Such
award shall be final and binding on both Contracting Parties. The ad hoc
arbitral tribunal shall, upon the request of either Contracting Party,
explain the reasons of its award.
7. Each Contracting Party shall bear the cost of its appointed
arbitrator and of its representation in arbitral proceedings. The relevant
costs of the Chairman and the tribunal shall be borne in equal parts by
the Contracting Parties.
Article 9
1. A dispute between an investor of one Contracting Party and the
other Contracting Party concerning an amount of compensation referred to
in Article 4 which has not been amicably settled after a period of six
months from written notification of that dispute shall be submitted to
international arbitration.
2. Where the dispute is referred to international arbitration, the
investor and the other Contracting Party concerned in the dispute may
agree to refer the dispute either to:
(1)an international arbitrator appointed by the parties to the
dispute; or
(2)an ad hoc arbitral tribunal to be appointed under a special
agreement between the parties to the dispute; or
(3) an ad hoc arbitral tribunal established under the Arbitration
Rules of the United Nations Commission on International Trade Law; or
(4)the International Center for Settlement of Investment Disputes
(ICSID) set up by the Convention on Settlement of Investment Disputes
between States and Nationals of other States, in case both Contracting
Parties become member States of this Convention.
3. If after a period of three months after the dispute is referred to
arbitration under paragraph 2 above there is no such agreement, the
parties to the dispute shall be bound to submit it to arbitration under
the Arbitration Rules of the United Nations Commission on International
Trade Law as then in force. The parties to the dispute may agree in
writing to modify these Rules.
Article 10
If the treatment to be accorded by one Contracting Party in accordance
with its laws and regulations to investments or activities associated with
such investments of investors of the other Contracting Party is more
favourable than the treatment provided for in this Agreement, the more
favorable treatment shall be applicable.
Article 11
This Agreement shall apply to investments which are made prior to or
after its entry into force by investors of either Contracting Party in
accordance with the laws and regulations of the other Contracting Party in
the territory of the Latter.
Article 12
1. The representatives of the two Contracting Parties shall hold
meetings from time to time for the purpose of :
(1)reviewing the implementation of this Agreement;
(2)exchanging legal information and investment opportunities;
(3)resolving dispute arising out of investments;
(4)forwarding proposals on promotion of investment;
(5)studying other issues in connection with investment.
2. Where either Contracting Party requests consultation on any matters
of Paragraph 1 of this Article, the other Contracting Party shall give
prompt response and the consultation be held alternately in Beijing and
Madrid.
Article 13
1. This Agreement shall enter into force on the first day of the
following month after the date on which both Contracting Parties have
notified each other in writing that their respective internal legal
procedures have been fulfilled, and shall remain in force for a period of
ten years.
2. This Agreement shall continue in force if either Contracting Party
fails to give a written notice to the other Contracting Party to terminate
this Agreement one year before the expiration specified in paragraph 1 of
this Article.
3. After the expiration of the initial ten-year period, either
Contracting Party may at any time thereafter terminate this Agreement by
giving at least one year's written notice to the other Contracting Party.
4. With respect to investment made prior to the date of termination of
this Agreement, the provisions of Articles 1 to 12 shall continue to be
effective for a further period of ten years from such date of termination.
In witness whereof, the duly authorized representatives of their
respective Governments have signed this Agreement.
Done in duplicate at Madrid on February 6, 1992 in the Chinese,
Spanish and English languages, all of which being equally authentic.
For the People's For the Kingdom of Spain
Republic of China
Qian qishen ..................
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